Stock Buyback Tax Guidance for SPACs High Priority for Treasury

Guidance on how the stock buyback tax in the tax-and-climate law applies to the liquidation of SPACs is a “high priority” for Treasury, an agency official said.

The law includes a 1% excise tax on the fair market value of stocks repurchased by publicly traded corporations with over $1 million in repurchased stock a year. The excise tax takes effect next year, and tax professionals want clarity about whether the stock buyback tax will apply when SPACs liquidate, especially for SPACs that chose choose to liquidate next year.

“We understand there’s urgency for guidance here,” said Brett York, ...